States told to go it alone on public transport

By Daniel Hurst

The Abbott government has defended cutting funding for public transport projects, arguing it is helping state governments free up their own money to deliver rail and bus projects without federal support.

The focus on roads at a budget estimates hearing came as a senior official from government advisory body Infrastructure Australia stressed public transport must be part of the mix to tackle urban congestion.

Infrastructure Australia national infrastructure co-ordinator Michael Deegan also confirmed the Melbourne Metro rail project - from which the federal government is withdrawing funding - was deemed to be a higher priority than the east-west link road project backed by Prime Minister Tony Abbott and Victorian Premier Denis Napthine.

The Coalition's costings, released two days before the election, factored in savings of $75 million over the four-year budget cycle from not proceeding with Melbourne Metro Rail, $453 million from abandoning the Cross River Rail plan in Brisbane, and $100 million from scrapping Perth urban rail public transport funding.

Assistant Treasurer Arthur Sinodinos argued the federal government's contributions to road projects increased the capacity of states to spend their own money on urban public transport.

"To the extent that the commonwealth government provides funding for road projects, that does release state government funding for other projects," he told the Senate Rural and Regional Affairs and Transport Legislation Committee on Monday.

Mr Deegan said Infrastructure Australia - which reports to the Council of Australian Governments on the readiness and worthiness of nationally significant projects - had provided advice to the former government that Melbourne Metro rail was a higher priority than the east-west link.

Speaking more broadly about urban congestion, Mr Deegan said the "one person, one car" habit was a big part of the problem.

"It's not rocket science," Mr Deegan said.

He said Infrastructure Australia believed planning needed to strike a "balance between public transport and roads".

Pressed by opposition senators about the loss of funding for particular projects previously earmarked by Labor, Senator Sinodinos said the Mid Year Economic and Fiscal Outlook to be released by Treasurer Joe Hockey next month would lay out "a complete infrastructure plan for the country".

Senator Sinodinos indicated projects would be funded by a combination of revenue and borrowing, while the government was also looking at ways to encourage more private-public partnerships.

The committee was told of looming job cuts in the Department of Infrastructure and Regional Development.

The department's secretary, Mike Mrdak, said he would "have to make significant reductions in staffing" due to resourcing decisions of the former and current governments.

Mr Mrdak said he expected to finalise the details in the next two to three weeks as part of the mid-financial-year budget review.